Now is the time to review all your records to ensure you maximise your tax deductions in this year’s tax return. Here are some top tax planning tips.
The tax return process is made much more efficient if you have all your documentary evidence organised now, rather than trying to find the documents months later.
Home office claims: If you have worked from home there are now three methods for which you can claim deductions for expenses such as power, phone and internet costs. The actual cost method involves claiming the actual work-related portion of your running expenses. Secondly, the fixed rate method includes a rate of 52 cents per hour plus any work-related portion of other home office expenses. Thirdly, cue to COVID-19, a new temporary ‘shortcut method’ has been introduced. Under this new method you can claim 80 cents per hour for all running expense including phone and internet costs. This method is currently only available from 1 March 2020 to 30 June 2020.
Depositing super contributions: Ensure superannuation contributions are deposited early. At least the week prior to Monday 22 June to ensure that they are recorded by your superannuation fund by Tuesday 30 June 2020.
You could consider making a tax deductible contribution into your super fund. There is the ability to claim the Government’s co-contribution scheme for contributions up to $500. Also, there is the superannuation contribution on behalf of a spouse scheme, whereby you can receive a tax offset of $540 for contributions of up to $3,000.
We recommend you speak to us prior to making a contribution into your super fund.
Capital losses: Consider selling loss incurring assets such as shares to help offset your tax liability from any capital gains on other assets.
Trust resolutions: If you are a trustee of a discretionary trust, you must document, before 30 June 2020, how the trust income will be distributed among beneficiaries.
Self-education expenses: If you are under taking self-education and intend to claim expenses such as course fees, books etc. your study must relate to your current work situation.
Donations: If you are considering making tax-deductible donations in the approaching months, it may be beneficial to bring forward the donation to before 30 June to claim a tax deduction in your 2020 income tax return.